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SOCIAL ASPECTSProactive ResponseThe JFE Group pursues a wide array of activities as a socially responsible company. Inspired by the need to satisfy our obligations to stakeholders and society, we are constantly seeking to improve compliance, transparency, industrial safety, product quality and our positive relationships with local communities.

Message from Senior Management

As a Socially Responsible Company

1. Provide quality products and servicesEarn the trust and regard of customers by endeavoring to provide quality products and services based on superior technology and by fully respecting and protecting the privacy of personal and customer information.

2. Be open to society at largeEndeavor to communicate with shareholders and the broader community, and actively disclose corporate information.

3. Coordinate and cooperate with the communityActively contribute to the community as a good corporate citizen in a spirit of coordination and cooperation.

4. GlobalizeEndeavor to achieve mutual understanding with people around the world, working from global perspectives and respecting local cultures and customs.

5. Exist in harmony with the global environmentContribute to the achievement of better living standards and the creation of societies that exist in harmony with the global environment.

6. Maintain proper relations with government andpolitical authorities

Endeavor to build and maintain sound and proper relationships with government and political authorities.

7. Respond appropriately to anti-social elementsFirmly resist all elements and organizations that threaten social order and stability, and refuse all illegal and improper demands.

8. Respect human rightsRespect all employees and members of the general public as individuals and refrain from any and all discrimination in corporate activities.

9. Provide challenging work environmentsProvide employees with attractive, safe and challenging work environments.

10. Comply with laws and ordinancesComply with all applicable laws and ordinances, endeavor to compete fairly and freely, refrain from illegal business activities, promote sound business practices, and be faithful and sincere in all activities and dealings.

JFE Group Standards of Business Conduct• All JFE Group executives and employees will faithfully adhere to the following Standards of Business Conduct in all facets of corporate activities.

These standards were created to embody the Corporate Vision of the JFE Group and go hand-in-hand with the Corporate Values.• Senior executives are to take the lead in communicating these standards to employees throughout the group and in creating effective systems and

mechanisms to ensure adherence to corporate ethical standards.• Senior executives shall be directly involved both in the resolution and implementation of measures to prevent the recurrence of any violations of these

standards. They shall disclose information about violations in a timely and accurate manner both inside and outside the group, shall clarify the authority and accountability involved and shall deal rigorously with offenses.

The JFE Group’s Corporate Vision posits a challenge: Contributing to society with the world’s most innovative technology. Coming to grips with this challenge, we have created a set of principles to guide JFE’s corporate activities, and these principles are embodied in the Corporate Values and JFE Group Standards of Business Conduct.

The Second Medium-Term Business Plan stipulates “promotion of CSR and establishment of corporate governance” as one of the Group’s most fundamental principles. The JFE Group has been making sincere and concerted efforts to earn—and then retain—society’s trust by ensuring rigorous legal and regulatory compliance, sustained commitment to the environment, and unwavering vigilance on issues of safety and security.

Our relationship with shareholders is predicated on effective communication. Lines of communication are maintained by various means, from simple but effective guided tours of our facilities to detailed investor relations meetings. From shareholders we turn to stakeholders—the Group devotes itself to enhancing the competitive-ness of Japanese manufacturing industries through technological collaboration with customers; dedicates itself to protecting the legacy

of future generations by developing technologies to conserve the natural environment. We advance in step with every stakeholder, as evidenced by our efforts to promote employment through mid-career recruitment drives; to build sound labor-management relations and safe working conditions; and to exist in harmony with local communities.

Member of the BoardExecutive Vice President

Yuichi Moriyama

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April May June July August September October November December January February March

Activities for the Year Ended March 2007

Believing with conviction that customers/clients, shareholders/investors, local communities and our employees are all important stakeholders, the JFE Group makes various contributions through the following activities in order to meet every expectation of our all stakeholders and be trusted as a responsible company.

Customers/Clients

The JFE Group is devoted to developing and providing products which fulfill customer satisfaction so that we can win full trust and enjoy prosperity with our domestic and international customers/clients.

Shareholders/InvestorsWhile striving to ensure fair and prompt information disclosure and stable profit return to shareholders, the JFE Group also endeavors to vitalize communication and build up relationships which should win trust and empathy.

Local Communities

The JFE Group is committed to build up good relationships with each nation and each region as a member of international society and that of local communities. JFE will continuously carry forward social contribution activities in various fields.

With Our Employees

JFE strives to improve working conditions and various personnel systems so that every employee can prove individual’s ability at the maximum and feel full job satisfaction as well as a great sense of security.

JFE SteelCompanywide disaster drill

Dongbu SteelNetworking event

with young employees

■ Annual shareholders’ meeting

■ Acquisition of treasury shares

　 (120 billion yen)

Guided tour at works for shareholdersNovember 20-23 (Chiba)

Notification Completion

JFE Steel (Fukuyama and Kurashiki areas)Completion of bachelor quartersJFE Steel’s Labor-Management Committee

Round-table conference between JFE Steel’s President and Chief Line Managers

Guided tours at works for shareholdersFebruary 23/24 (Keihin)

March 5 (Kurashiki)March 6 (Fukuyama)March 21/22 (Chiba)

JFE Engineering:Distinguished AccomplishmentAward from the President JFE College

JFE Mechanical FukuyamaManufacturing Trial Festival

2006

JFE Engineering’s Machinery CenterIn-house skill contest

Guided tour at works during summer break

China Japanese Speach Contest

Local cleanup activities (Tsurumi Works)

JFE West Japan Festival in Kurashiki

Training for local government staff in Kurashiki area

Guided tour at works during winter break

Cho Chikun Cup:Go Competition

ENEX 2007

JFE 21st Century Foundation year ended March 2007 presentation ceremony to donate grant for university research

JFE Chiba Festival

Energy Solution &Thermal Storage Fair ’06

West Japan WorksAwarding ceremony for material clients

Eco-Products 2006

Briefing for institutional investors and security analysts

QUO Card sent to eachshareholder who

exercised voting rightGuided tour at works for shareholders

September 20/23 (Chiba)

JFE West Japan Festival in Fukuyama

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CSR System

Corporate Ethics Hotlinewas set up in the year ended March 2004 as a contact point for employees to report and consult. All of its issues are deliberated by the Compliance Committee.

Compliance Guidebookexplains a code of conduct plainly on a case-by-case basis with its copies delivered to all employees of both JFE Holdings, Inc. and each operating company.

Report on Measures to Prevent Recurrence of Antimonopoly Law Violations

The JFE Group deeply regrets that some companies belonging to the Group have been subjected to administrative actions and investigations several times on the grounds of violating the Antimonopoly Law. In order to prevent such violations from occurring again, the Group has been working on and carrying out radical reform. At the same time, each operating company has been implementing the following specific measures in order to ensure full compliance with the Antimonopoly Law.

[Specific Measures]1. Prepare a Manual on Compliance with the Antimonopoly

Law and a Compliance Guidebook, deliver them to each employee, and conduct practical training by utilizing the two documents.

2. Conduct e-learning training for employees to learn basic knowledge on the Antimonopoly Law.

3. Conduct the employees’ awareness survey concerning general corporate ethics including the Antimonopoly Law.

4. Disseminate the Corporate Ethics Hotline to the full.

5. Ensure that all employees should recognize compliance with laws and regulations as one of the operational goals on their own.

6. Promote personnel exchange among operating divisions and shorten the personnel rotation cycle.

7. Clarify the decision-making process of receiving orders and reinforce supervision by administrators during the process.

8. Strengthen the Group’s internal audit system and audit compliance status concerning the Antimonopoly Law.

etc.

The JFE Group has set forth the promotion of CSR and establishment of corporate governance including “rigorous compliance” as one of basic policies under the Second Medium-Term Business Plan, and will continuously strive to prevent recurrence of Antimonopoly Law violations by c o n s i s t e n t l y i n s p e c t i n g a n d i m p rov i n g t h e above-mentioned measures.

Major Activities in the Year Ended March 2007■ JFE Steel CorporationJFE Steel Corporation defines CSR as an endeavor to “improve stakeholder satisfaction and raise enterprise value.” The company is committed to its CSR obligations, giving top priority to fields which affect the foundations of corporate sustainability, including environmental protection, safety & disaster prevention and compliance. At the same time, we set strategic challenges on (1) establishing a Plan-Do-Check-Action (PDCA) cycle and (2) raising CSR awareness.

The CSR Council (chaired by the President) promotes the CSR concept within the company; deliberates CSR-related challenges and policies, and monitors progress of concrete measures. In the year ended March 2007, the CSR Council convened ten meetings, discussing agendas for each of twelve committees/subcommittees.

More specifically, in June 2006, the Subcommittee for Raising CSR Awareness prepared and distributed a “Compliance Guidebook” to 15,000 employees including officers of the company and 45,000 employ-ees including officers of group companies, in order to

improve compliance awareness. During the month of December 2006, each department of JFE Steel Corpo-ration concentrated on raising awareness for at least 30 selected workplace-based items from the Guidebook.

The Subcommittee for Establishing and Circulating Rules established a reinforcement month for legal compliance (October of each year), and distributed the President’s message to all employees in order to instill a basic awareness of legal compliance. Since its startup in 2005, the Subcommittee has also been monitoring the use of “Information on Establishment, Revision and Abolition of Laws and Regulations” on the intranet, and continuously improving this intranet section for more efficient operation since its startup in 2005.

Moreover, the Subcommittee for Internal Audits conducted special auditing related to CSR agendas, while the Subcommittee for Social Contributions received more visitors on plant tours; encouraged JFE Festivals to co-host events with local governments; and expanded support extended to local sports events, etc.

In the year ending March 2008, JFE Steel Corporation will strive to improve CSR awareness further by

disseminating corporate standards of business conduct and introducing the activities of each commit-tee/subcommittee of the CSR Council through it’s the company’s internal communication press. At the same time, we will make every effort to share information and enrich communication.

■ JFE Engineering CorporationDefining “compliance,” “safety,” “disaster prevention,” and “environmental conservation” as its four basic responsibilities, JFE Engineering Corporation promotes business activities based on its conviction that CSR should be an essential part of management. With regard to compliance in particular, JFE Engineering perceives compliance with the Antimonopoly Law as the most important challenge, reinforcing activities to prevent recurrence of violations. To this end, we are committed to enhance employees’ awareness through measures such as compliance training and copy delivery of the Compliance Guidebook, as well as being devoted to improvement of operation process.

CSR System

JFE Group CSR Council

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Chairman: President of JFE HoldingsMembers: Executive Vice Presidents, Corporate Officers, Fulltime Auditors,

President of JFE Steel, President of JFE Engineering, respective presidents of operating companies, etc.

JFE Group Compliance Committee

JFE Group Environmental Committee

JFE Group Internal Control Committee

Environmental Committee

Subcommittee for Internal Audits

Subcommittee for Raising CSR Awareness

Subcommittee for Personnel/Labor Affairs

Subcommittee for Social Contributions

Subcommittee for Group Companies

Subcommittee for Safety & Disaster Prevention

Compliance Committee

Subcommittee for CS (Customer Satisfaction)

Subcommittee for Establishing and Circulating Rules

Risk Management Committee

Subcommittee for Internal Control

Agendas

Compliance, environment, internal control, personnel/labor, safety & disaster prevention, and social contribution, etc.(1) Group-wide deliberations

(including instructions/guidance on important issues)

(2) Monitoring of policy dissemination(3) Information sharing on challenges and

response cases to actual troubles, etc.

CSR SystemThe JFE Group is fully aware of corporate responsibility as a member of society, bases its management on a policy of Corporate Social Responsibility (CSR), and is determined to further strengthen CSR efforts.

The JFE Group CSR Council (chaired by the Presi-dent) was established at JFE Holdings, Inc. in October 2005. The agendas encompass various issues including but not limited to compliance, environment, internal control, personnel/labor, safety, disaster prevention, and social contribution. The organization is structured to supervise and guide the entire Group’s CSR efforts. Particularly with regard to “Compliance,” “Environment,” and “Internal Control,” we have inde-pendent committees (headed by the President) respec-tively to strengthen the relevant efforts.

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Authentication system based on finger vein biometrics

Efforts with THiNK SMART

In November 2005, the Steel Research Laboratory, together with JFE R&D Corporation, became the industry’s first to establish THiNK*1 SMART*2, a testing and research facility mainly for steel products for social infrastructure (such as plates, shape steel and steel pipes used in the fields of civil engineering, construction and bridges) and for technologies to use and process such products.

THiNK SMART seeks to promote technology development and facilitate the early practical application of new products by providing JFE Group’s new steel products, advanced utilization and processing technologies and design, manufacturing and maintenance technologies to customers in the steel structures sector and also to members of university and corporate research institutes.*1 THiNK:

Techno Hub INnovation Kawasaki

*2 SMART: Steel Materials for Application Research & Technology

JFE Group Quality Assurance System■ JFE Steel’s Quality Assurance System JFE Steel has been awarded ISO 9001 and various other authentications such as API and Register of Shipping. The company endeavors to strengthen quality enhancement/management systems by ensuring the PDCA cycle under a standardized system based on quality manuals. At the same time, JFE Steel has been structured to produce high value-added products such as “Only One” and “Number One” products in a stable and reliable manner.

JFE Steel promotes product development together with customers, and supplies products which not only take into account each customers’ unique environment and security, safety requirements, but also aim to make a positive contribution to the enhancement of customers’ competitiveness.

■ JFE Engineering’s Quality Assurance System

JFE Engineering has acquired ISO 9001 and estab-lished a quality assurance system accommodating the characteristics of products by constructing Quality Management Systems (QMS) for each business depart-ment under the QMS of the whole group.

We endeavor to thoroughly assure quality through QMS from sales, design, and construction to backup services. Furthermore, we will enhance management of various business processes for ensuring stable quality in order to provide products and services which customers are fully satisfied with.

Customer Center

THiNK SMART

With Customers and Clients

President

Group-wide Quality Committee

Group-wide QMS Management Representative

Individual QMS Organizations

Head of Division

Quality Committee

Head of Sales Department Head of Engineering Department

Group Companies

QMS Manager

Basic Organization Chart of JFE Engineering’s QMS

Improvement of Customer Satisfaction (CS)The JFE Group promotes communication with customers to improve customer satisfaction. The Group is also committed to improving customers’ evaluation on JFE through divisional activities ranging from product development and manufacturing to sales.

JFE Steel conducts questionnaire surveys and, based on the analyzed results, promotes CS improvement activities.

The ongoing after-service activity of JFE Urban Development is also aimed at the enhancement of customer satisfaction. The directly-managed Customer Center provides a full range of services in rapid response to customer needs, serving as a contact point for condominium after-sales services by the seller JFE Urban Development itself.

Adoption of Authentication System Based on Finger Vein BiometricsTo further strengthen the protection of personal information, JFE Urban Development has installed security doors that use a biometric authentication system (based on venous vessel patterns) at each of the two entrances of the room where customer information is stored. With access logs being also available, this system provides stronger security than the numeric keypad authentication in general use.

JFE Holdings, Inc. and the JFE Group companies in Japan (“the JFE Group” hereinafter) have formulated the following policies on the handling of personal information to facilitate the smooth and appropriate administration of group opera-tions.1. Basic policies on the protection of personal information(1) The JFE Group will, in light of the growing use of personal

information resulting from advances in data communications, endeavor to protect the rights and interests of the individual while also respecting the utility of the personal information it holds.

(2) The JFE Group will observe the “Law concerning the Protec-tion of Personal Information” and all other relevant laws and ordinances, and will endeavor to adhere to both the spirit and the letter of the law as it protects personal information.

(3) The JFE Group will endeavor to appropriately protect personal information by formulating internal rules on the management of personal information and by informing, educating and training its employees on these rules and on all applicable Japanese laws and ordinances. The JFE Group will also review and improve this privacy statement and internal rules on an on-going basis.

2. Policies regarding the collection and use of personal information(1) Designation of purposes, appropriate collection and use

activities The JFE Group will, when handling personal information,

endeavor to designate the purpose of use as specifically as possible and will not collect or use personal information beyond this purpose without the prior consent of the individual. The JFE Group will not use falsehoods or other illicit means to collect personal information.

(2) Appropriate safety management The JFE Group will endeavor to maintain the accuracy of

the personal information it has collected and will take necessary and appropriate measures to prevent illicit access to personal information, disclosure, loss or modification of personal information and other forms of damage and injury. It will also provide necessary and appropriate supervision to employees and service providers handling personal information to ensure that personal information is managed in a safe and appropriate manner.

(3) Provision to third parties and joint use with third parties The JFE Group will not furnish personal information to third

parties without the prior consent of the individual. In the event that the JFE Group uses personal information jointly with third parties, it will notify the individual and/or publish all matters required by applicable Japanese laws in advance.

(4) Disclosure, correction, suspension of use and handling of complaints

The JFE Group will deal appropriately and as required by applicable Japanese laws with requests from the individual for the disclosure, correction, addition, deletion or suspension of use of personal information regarding him or her. The JFE Group will also deal appropriately and speedily with complaints regarding the use of personal information.

3. ContactAll inquiries regarding the handling of personal information should be addressed to the General Administration Dept. of JFE Holdings or to the responsible departments listed on the websites, etc., of individual JFE Group companies.

JFE Group Privacy Statement

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IR Calendar for the Year Ended March 2007

Trends in Earnings per Share (EPS) and Annual Dividends

With Shareholders and Investors

Dividend payout ratio

25％ target

Total returns ratio for the year ended March 2007

64％

IR website For shareholders

Without any use of agricultural chemicals, “Eco-saku” is a safe and clean washed vegetable grown in greenhouse of which hygiene is thoroughly controlled. Since this produce is not affected by daylight hours, weather conditions and seasonality, it can offer delicacies of the best season at any time throughout the year.

Guided Tours at Works for Shareholders

To help our shareholders gain further understanding of the JFE Group, we started to organize guided tours at plants and corporate briefing sessions in the year ended March 2007.

More specifically, 2,530 shareholders participated in the 24 guided tours at JFE Steel’s plants in total, having visited either the East Japan Works (Chiba, Keihin) or the West Japan Works (Kurashiki, Fukuyama) during the year ended March 2007.

We plan to maintain these tours for our shareholders from the year ending March 2008 onward.

Guided tours at works for shareholders

Briefing for institutional investors and security analysts

Distribution oftop interview movie

Organic and washed vegetables “Eco-saku” sent as a courtesy gift to shareholders

QUO Card sent to each shareholder who exercised a voting right

Basic Policy for Returns to ShareholdersThe JFE Group considers that generating returns to its shareholders is one of its top management policies, and pays dividends in consideration of the trends in its business performance, while striking a balance with internal reserves to prepare for aggressive business expansion in view of enhancing the Group’s financial position and improving its medium-term business performance, based on a stable and highly profitable structure.

The Second Medium-Term Business Plan (for the three fiscal years from April 1, 2006 through March 31, 2009) includes a basic dividend policy to increase its payout ratio to about 25%, and slates dividends of ¥200 billion to be paid out from net income of ¥800 billion on a consolidated basis during the three years. In the first year ended March 2007, we declared a dividend of ¥120 per share (payout ratio: 23.4%).

In addition to the dividends, JFE acquired treasury shares of ¥120 billion during the year ended March 2007, resulting in a total returns ratio of 64%.

It is our basic policy to continuously and proactively generate returns to our shareholders.

Basic Policy for Information DisclosureThe JFE Group considers that timely and appropriate disclosure of corporate information to investors is the bedrock of a healthy securities market. We constantly endeavor to enhance our internal framework so as to disclose consistent corporate information in a prompt, precise, fair and appropriate manner from the viewpoint of investors.

Communication with Shareholders and InvestorsThe JFE Group makes efforts in fair disclosure through domestic and overseas investor relations activities, in-cluding making presentations targeted at institutional investors and securities analysts, giving individual press interviews, visiting domestic and overseas invest-ors and transmitting information via its website.

We also strive to provide the same level of informa-tion overseas as in Japan, such as having individual meetings overseas with overseas institutional investors and issuing key press releases simultaneously in both Japanese and English as a fundamental rule.

Based on the recognition that communication with retail investors will become increasingly important in the years ahead, we will pursue activities more intensively in this area in the future.

With respect to shareholders, we send reports upon the semiannual and annual closing of accounts, and with respect to general investors, we promptly disclose

various presentation materials on our website. We are making aggressive efforts in providing information, including presentations at branches of securities companies, etc., and streaming videos featuring interviews with the top management.

In the year ended March 2007, we also sent a QUO Card to each shareholder who had exercised the right to vote in the 2006 annual shareholders’ meeting, in addition to starting to organize guided tours at works for shareholders. Furthermore, a shareholder special benefit plan was established in order to enhance investment attractiveness of the Group and make more people hold JFE’s shares for mid- and long-term period, as well as with the aim of appreciating and responding to support from our shareholders. (As a courtesy gift, JFE presents our shareholders with organic and washed vegetables “Eco-saku,” which JFE LIFE CORPORATION, one of the JFE Group companies, produces and sells.)

EPS (yen) Annual Dividends per Share (yen)

600

450

300

150

0

120

90

60

30

0

2005 2006 2007

273.97

555.02

100

120

45

513.58

(Years ended March 31)

Number of participants for guided tours at works for shareholders

2,530shareholders

June 28, 2006 Annual shareholders’ meeting

July 27, 2006

Announcement of summary of consolidated financial and operating results for 1Q of the year ended March 2007

September 7, 2006Announcement of the revised financial forecast for the year ended March 2007

November 10, 2006Notification of acquisition program of treasury shares (¥120 billion)

October 26, 2006

Announcement of the financial results for the 1st half of the year ended March 2007 and the financial forecast for the year ended March 2007

January 31, 2007

Announcement of summary of consolidated financial and operating results for 3Q of the year ended March 2007

February 14, 2007Notification of completed acquisition of treasury shares (approximately ¥120 billion)

March 1, 2007Announcement of the revised financial forecast for the year ended March 2007

April 26, 2007 Announcement of the financial results for the year ended March 2007

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Philanthropic Activities by the JFE 21st Century FoundationThe JFE 21st Century Foundation, which was launched in 2003 as a progressive successor to the Kawasaki Steel 21st Century Foundation established in 1990, engages in projects aimed at fulfilling the purpose of its establishment, that is, to further promote harmony between the Group’s business activities and society in general, and share prosperity with the community at large to achieve a more open presence (the year ending March 2008 project expenses: ¥110 million). In addition, the research accomplishments are disclosed to the public in reports and on the Foundation’s website so that they can be utilized broadly in society.

■ Grants for Technical Research Since the year ended March 1992, the JFE 21st Century Foundation has consistently provided research grants (issuance of competitive research funds by inviting applications from the public) for the purpose of promoting technical research at universities. By the year ended March 2007, 318 projects have received a cumulative total of ¥640 million in research grants, resulting in the Foundation’s high rating among universities. In the year ended March 2007, the Foundation provided a total of ¥52 million in research grants to 17 research projects related to steel technology and 9 projects related to environmental technology (¥2 million per project), chosen from among 189 grant applications from 67 universities.

■ Grants for Asian History Studies In the year ended March 2006, the JFE 21st Century Foundation introduced grants for the purpose of promoting studies which help create a vision for industry and culture in Japan to coexist and prosper harmoniously with Asia in the 21st century. In its second year ended March 2007, the Foundation received 41 grant applications from 27 universities and provided a total of ¥12 million in grants to eight projects (¥1.5 million per project).

■ Donation of “University EducationMaterials—Steel Engineering”

The JFE 21st Century Foundation produced educational materials (two books and one CD-ROM) which introduce not only basic theories of steel engineering but also the latest technology and research by steel manufacturers in order to foster interest in steel materials and manufacturing technologies among engineering researchers and students at Japanese universities. A total of 800 or more copies of each material were donated to universities across the country.

■ Supporting Educational Activities inRegions with Ties to Steel

In the year ended March 1992, the Foundation established the JFE 21st Century Foundation Award in the creative writing competition (essays, poems, tanka and haiku) targeted at Japanese elementary school and junior high school students studying overseas organized by the Japan Overseas Educational Services (JOES), and has since been co-sponsoring the event and donating copies of an anthology of winning entries named “Learn from the Earth” to elementary schools and public libraries. In the year ended March 2007, the Foundation donated the copies to 1,165 elementary schools, 595 junior high schools and 110 public libraries in 13 cities and 3 towns.

For these donations, the Foundation received letters of appreciation from the head of the education board of Fukuyama City, etc.

Letter of donation presented by Mr. Sudo, Chairman of the Foundation

Recipients of grants for technical research

Recipients of grants for Asian history studies

Handa Community Industrial Festival

Community Festival (Keihin area)

JFE Junior Soccer (Chita Soccer Tournament)

Co-sponsored Activities and Events in the Year Ended March 2007

• Cho Chikun Cup: Go Competition (Chiba City) • Chiba Prefectural Youth Go Competition (Chiba City,

Funabashi City) • Chiba Citizen Music Festival (Chiba City) • The Ninth Symphony Special Concert by Chiba Citizens

(Chiba City) • Japanese Traditional Noh Drama at Night in Hibiya City

(Chiyoda-ku, Tokyo) • JFE Lunchtime Concert (Kawasaki City) • Kawasaki Contemporary Sculpture Exhibition

(Kawasaki City) • Community Festival: Music Concert (Kawasaki City) • Yokohama Children’s International Peace Program

(Yokohama City) • Handa Community Industrial Festival (Handa City) • Mie Prefecture High Schools’ Robot Tournament (Tsu City) • Kurashiki Music Festival (Kurashiki City) • Fukuyama Rose Festival (Fukuyama City) • Fukuyama’s Best Entertainers (Fukuyama City) • Noh Drama Performance on Noh Stage in Setouchi

(Fukuyama City)

Donated books

The First All China Selection— China Japanese Speech Contest

For further information

The JFE 21st Century Foundation http://www.jfe-21st-cf.or.jp/

With Local Communities

Total number of Grants for technical research

projects318

Assenting Cultural Activities and Events in Regions with Ties to Steel (Co-sponsorship) The JFE 21st Century Foundation cosponsors and supports various cultural activities and events hosted by local authorities and local community groups in which many members of the general public participate.

Donation and Assistance Activities The JFE Group carries out various donation and assistance activities in a wide array of fields including casualty assistance, education, community, welfare, culture and art in order to contribute to both regional and international societies. In the year ended March 2007, the Group donated and endowed approximately ¥420 million in total.

Among them, we supported “the First All China Selection—China Japanese Speech Contest,” the first Japanese speech contest for university students across China, as a means to support culture and international exchange. We are committed to continuously support the second contest, which is pledged to be held in the year ending March 2008.

Open-day Events at Steelworks For the local residents, JFE Steel holds open-day events every year at each of its steelworks.

The East Japan Works held “the 29th JFE Chiba Festival” and “the 2nd Community Festival (in Keihin)” in collaboration with local governments of Chiba City and Kawasaki City. There were 60,000 people in total visited and enjoyed those events.

Also, with the aim of supporting local sports promotion and development, JFE Steel hosts local sports events including tournaments of soccer, baseball and volleyball held in recreation facilities within its steelworks. A soccer tournament, hosted for elementary students at Chita Works (Handa City, Aichi Prefecture) has become one of the region’s biggest events, with more than 1,000 participants from 48 teams compete for the championship.

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Employment rates for disabled persons ■ JFE Steel

Next Generation Certification Mark

Labor-management Committee

Presentation of the JFE Steel President Award

Mie Data Craft Co., Ltd.

2.05％ ■ JFE Engineering

2.29％ ■ Kawasaki

Microelectronics

2.21％

Received Excellent Award (Mie Prefecture Governor Award) in Abilympics Mie

JFE Engineering: Distinguished Accomplishment Award from the President

With Our Employees

Employment of People with DisabilitiesJFE Steel puts a great deal of effort into promoting employment of people with disabilities. In order to provide various disabled persons with workplaces where they can fully exercise their abilities, experience challenging and rewarding roles, we operate three subsidiaries; JFE Apple East Corporation, JFE Apple West Corporation and Mie Data Craft Co., Ltd. Not only to employ a great number of disabled people, but also we strive to create a worker-friendly environment at these subsidiaries.

At JFE Steel, JFE Engineering and Kawasaki Microelectronics, the employment rates for the disabled people are 2.05%, 2.29%, and 2.21% respectively that are much higher than the statutory rate (1.8%).

Creating a Worker-friendly EnvironmentJFE Steel endeavors to enhance its work system and welfare program so that its employees can keep working in comfortable condition. For example, we have extended the child-care leave period and introduced shorter working hours for employees who are raising small children in order to enable them to strike a balance between work and family life. JFE Steel and JFE Engineering obtained the Next Generation Certification Mark (accredited by the Minister of Health, Labour and Welfare) in 2007.

Moreover, the housing program will be dramatically revised in the year ending March 2008 as part of our effort to proactively respond to diversifying lifestyle of our employees.All employees who have borne children in the year ended March 2007 took the child-care leave at JFE Steel Corporation and JFE Engineering Corporation.

Respecting Human RightsThe JFE Group is engaged in activities to respect hu-man rights on a group-wide scale, with the recognition that respecting human rights of members of the gener-al public and employees is a corporate social responsi-bility and one of our crucial management issues.

More specifically, we are committed to (1) imple-ment various training courses for human rights enlight-enment steadily, (2) guarantee equal job opportunity and promotion of fair personnel administration, and (3) support toward group companies’ relevant activities, in order to foster employees with proper understanding and awareness of various human rights issues who can take the right action as a business person and a mem-ber of society. (About 4,000 employees of JFE Steel in total participated in human rights training courses in the year ended March 2007.)

For the prevention of sexual harassment, our efforts include stipulating anti-sexual harassment clauses in work regulations, providing training courses, putting up posters, and establishing male and female counseling services at each office. We are also engaged in delivering officers’ messages during the human rights week, soliciting human rights slogans (5,226 applications received), and posting various enlightenment information on our website related to human rights.

Labor-management InitiativesThe JFE Group endeavors to build up healthy and con-structive labor-management relations. Under the recog-nition that open communication between labor and management is essential to this end, we are committed to proactive labor-management dialogue by creating opportunities for the President, the senior manage-ment and the union representatives to periodically ex-change opinions on management issues and policies, etc. (quarterly labor-management conferences).

Furthermore, effective in the year ending March 2008, the Labor-management Committee Concerning Balance between Work and Life will be established for labor-management to frankly and broadly discuss how to balance work and life, which has been one of the social challenges of recent times.

Internal Award SystemIn order to share the corporate vision of “contributing to society with the world’s most innovative technology” across the company, JFE Steel has an internal award system to recognize employees and in-house groups who have achieved distinguished performances in the field of developing new technology or reforming the operation process and honor their achievements.

Every year, such distinguished performances are honored to receive technology awards, accomplish-ment awards or group awards, depending on the sub-stance of the performances. Among them, exceptional-ly excellent accomplishments are honored to receive the JFE Steel President Award (8 Awards including 2 Highest Awards in 2006). Moreover, the New Product Development Award has been established for new product development to be recognized for its remark-able achievement contributing to expansion of Only One/Number One products (10 Awards including one Golden Award in 2006).

JFE Engineering honors excellent organizations and companies every year by presenting the Distinguished Accomplishment Award from the President for their re-markable achievements concerning the JFE Group’s business activities and operations (a total of 20 in the years ended 2006 and 2007). We also offer awards to individuals who contribute to the busi-ness significantly, such as the Challenge Award for those who achieved very advanced operation targets and the Meister Award for those who have excellent manufacturing skills.

C H A P T E R S O C I A L A S P E C T S

J F E G R O U P

B U S I N E S S

R E P O RT 2 0 0 7

Ⅱ

SOCIAL

ASPECTS

45 46

68.9％ Re-employment rate under the Senior Expert Program

Trends in Rate of Accidents Causing Absence from Work at JFE Steel Corporation

2.0

1.5

1.0

0.5

0.02005 20072006

JFE SteelAll industries

Steel industry

(Years endedMarch 31)

Disaster drillJFE Steel result presentation session of J1 Activities

JFE Engineering JE1 K-UP Activities

Patrimony of Skills and Techniques/Re-employment of Senior WorkersTo prepare for the inevitable dramatic generation shift in the workforce over the next decade, JFE Steel’s steelworks have developed and implemented a personnel training system which encourages workers in novice or middle-levels to improve their skills, in a planned and consistent manner to make sure skills and techniques of each employee are passed down to the next generation.

In addition, at the time of its inception, JFE Steel introduced a program to continually re-employ workers beyond the retirement of 60—dubbed the Senior Expert Program—based on the view that senior employees with a wealth of valuable experience and expertise are extremely capable members of the workforce. Under the program, senior employees who want to keep working beyond the retirement age are re-employed. JFE Steel’s policy is to gradually extend employment to the age of 65 and provide senior employees with more opportunities to play an active role in their workplaces.

JFE Engineering started an internal human resource bank system for former employees of each group company on October 1, 2006, when the JFE Human Resource Bank was established.

Under this system, former employees are enrolled in a way to categorize their expert skills/techniques, qualifications, and project experiences, etc., and sign an employment contract with a division which runs short of human resources such as engineers or with a division which needs skills passed down from skilled experts. We believe this will become a model case for measures of passing down skills and techniques to the next generation.

Creating Vibrant Work Environments through Small Group ActivitiesAt JFE Steel, about 1,500 in-house groups across the company are engaged in small group activities dubbed “J1 Activities,” where important issues concerning work environments such as improvement of quality and operation are tackled and a number of challenges are overcome. On top of this, the JFE Family Result Report-ing Conference (a companywide conference) is held twice a year, with its participants including domestic and international group companies. Excellent groups are dispatched to our facilities in overseas as part of JFE Steel’s effort to vitalize these activities. Such daily activities and result reporting conferences give employees abundant chances to demonstrate their creative ingenuities and practical abilities, and enhance individual capabilities. In this way, JFE Steel endeavors to create work environments where employees can increase their job satisfaction and a sense of achievement with fulfilling their own goals. We believe that these activities ultimately contribute to corporate growth.

Meanwhile, at JFE Engineering, more than 200 circles (including those of group companies) are engaged in “JE1 K-UP Activities” where “K” represents “Kaizen (improvement), Kouritsu (efficiency), Keiken (experience), Katsuryoku (vitality), and Kaeru (change).” Under this slogan, employees across workplaces are united to challenge important issues and meet such challenges by undergoing more creative ingenuities.

Industrial Health and SafetyEnsuring safety and health of employees is fundamen-tal to the manufacturing industry and is the basis of corporate sustainability.

During this year, JFE Steel has reconfirmed and ensured its fundamental belief that safety should have the first priority over any other things, endeavoring to reinforce safety measures.

The rate of accidents causing absence from work had been on the decline since 1998, however the rate worsened over the past three years. We will continue to make improvements in all aspects of facilities, personnel, and operations. Starting in this year, we will especially enrich our education/training courses for administrative supervisors to improve their knowledge and leadership ability related to safety issues. Under this new leadership, we are determined to create safe workplaces.

JFE Engineering promotes flexible and detailed safety control, taking account of circumstances of construction sites and operation bases across the country as well as each manufacturing plant. We are striving to eliminate accidents causing absence from work by enhancing safety awareness of individual employees as well as carrying out united safety activities among group companies.

Efforts to Prevent DisastersJFE Steel has established a companywide disaster prevention system in order to forestall business discontinuation that might be caused by natural disasters and system problems, etc., and ensure safety for local residents as well as for our employees. The system is also aimed to assure stable product supply to our customers.

In October 2006, we conducted disaster prevention training at all locations of our facilities. More specifically, on the assumption that an earthquake of intensity 6 has hit regions and caused disasters at steel works, a series of operations such as gathering, analyzing and reporting information were implemented. Separate training was also conducted at each location. We also checked whether internal and external communication tools, system backup, fuels and logistics to obtain foods and other commodities were all secured.

The second companywide disaster prevention training is slated for the year ending March 2008. We are preparing in order to check at the training whether such confirmation and communication via satellite phones would work well enough even on an assumed holiday, since the first training revealed that the confirmation of employees and their families’ safety would be a challenge.

2.0

1.5

1.0

0.5

0.0

JFE Engineering

2007

Trends in Rate of Accidents Causing Absence from Work at JFE Engineering Corporation

2005 2006

All industries

Construction industry

Data for the year ended March 2007 have not been announced yet for all industries and the steel industry (as of June 2007).

(Years endedMarch 31)

C H A P T E R S O C I A L A S P E C T S

J F E G R O U P

B U S I N E S S

R E P O RT 2 0 0 7

Ⅱ

SOCIAL

ASPECTS

47 48